funnel-analysis
The point of a funnel is not to celebrate the top number — it's to find the single biggest leak and fix it.
Inputs to gather
- The funnel definition — ordered list of events (e.g. visit → signup → activate → paid).
- Window — the date range (typically last 30 days).
- Segment — all users? a cohort? a channel?
- Data source — PostHog, Mixpanel, Amplitude, GA4, custom SQL.
Method
- Pull conversion at each step.
- Compute step-to-step rates and the overall rate.
- Identify the step with the lowest conversion rate, not the lowest absolute count.
- Compare that step's rate to industry benchmark (if known) and to last period.
- Hypothesize 3 causes. Rank them by likelihood × ease-to-test.
- Recommend one experiment.
Output format
## Funnel
| Step | Users | Step-to-step | Cumulative |
|---|---|---|---|
| Visit | 12,400 | 100% | 100% |
| Signup | 1,488 | 12.0% | 12.0% |
| Activate | 446 | 30.0% | 3.6% |
| Paid | 67 | 15.0% | 0.54% |
Window: <date range>
Segment: <segment>
Source: <data source>
## Biggest leak
**Activate → Paid (15.0%)** is the lowest step rate. Industry benchmark for B2B SaaS at this stage is 20-30%. We are 5-15 points below.
## Hypotheses
1. **Pricing-page friction** (high likelihood, easy to test) — users land on pricing without seeing ROI proof.
2. **Onboarding incomplete** (medium, medium) — users hit the paywall before reaching their "aha moment."
3. **Wrong ICP traffic** (medium, hard) — top-of-funnel is bringing tire-kickers.
## Recommended experiment
A/B test: insert a one-screen ROI calculator between activate and pricing.
Hypothesis: lifts Activate → Paid from 15% → 20%.
Sample size needed: ~3,500 users per variant for 95% confidence at 5pp lift.
Expected runtime: 4 weeks at current traffic.
## Caveats
- "Activate" is currently defined as <event>; some teams define it differently.
- Last week of data may be incomplete due to <reason>.
Hard rules
- Always declare the funnel definition explicitly. "Activated" means nothing without the event.
- Never average step rates — multiply them for end-to-end conversion.
- Don't recommend an experiment without a sample-size estimate.
- If a step has < 200 users in the window, flag the rate as "low confidence."